Consolidated Activity Report 1

Table of Contents 1. Activity results..................................................................................3 2. Major Risks ....................................................................................19 3. Management Bodies ......................................................................26 4. Development Forecasts .................................................................33 5. Significant Transactions.................................................................42 Large-scale and significant transactions concluded.......................42 Transactions with related parties ...................................................47 Loan Agreements...........................................................................50 Off-balance reporting .....................................................................53 6. Investments ...................................................................................55 7. Information about the shares .........................................................60 1. Avtivity results During the past year of 2008 the activity of the companies from the structure of Holding Roads Plc focused on active participation in infrastructure construction tenders organized on the territory of the Republic of Bulgaria. Except the participation in big tenders, the activity of Holding Roads Plc also included: • participation in infrastructural construction tenders on the territory of the Republic of Albania; • investment in stock and shares of legal persons which are engaged in business operations similar to the business operations carried out by the Company; • organization and creation of conditions for carrying out the business operations of the holding structure; • support of the Company’s subsidiaries in the performance of their investment operations which are necessary to provide resources for the projects which they implement, as well as offering assistance to them in carrying out their day-to-day ordinary business operations. The consolidated income which was generated by the business operations of Holding Roads Plc for 2008 is estimated at BGN 200 002 thsnd which is more by 32% in comparison with the previous year when the income which was generated by the business operations were equal to BGN 151 546 thsnd. The consolidated net income by sales in 2008 is more by 26% in comparison with such income in 2007 and is estimated at BGN 189 529 thsnd, while in 2007 it was equal to BGN 150 534 thsnd. The consolidated net income by sales of services amounts to BGN 145 038 thsnd, while in 2007 it comes up to BGN 119 455 thsnd. The consolidated financial income for 2008 is estimated at BGN 10 473 thsnd. The consolidated financial income for 2007 is estimated at BGN 1 012 thsnd. The increase is due to the increase of income by interests which was BGN 827 thsnd in 2007 and increased to BGN 2 247 thsnd in 2008. In 2008 positive differences by operations with financial assets and instruments were generated within the amount of BGN 5 849 thsnd. The other financial income increased from BGN 1 thsnd in 2007 to BGN 1 938 thsnd in 2008. In 2008 the consolidated expenses for business operations of Holding Roads Plc are estimated to BGN 196 371 thsnd, while in 2007 – BGN 133 892 thsnd. In respect with the expenses for business operations biggest is the share of expenses for hired services – 36% or BGN 70 961 thsnd. Expenses for materials are equal to BGN 62 784 thsnd which comprise 32% from the total expenses for business operations. In 2008 the consolidated financial expenses are estimated at BGN 14 163 thsnd against BGN 6 077 thsnd during the previous year. Biggest is the relative share of expenses for interests. In 2008 such are equal to BGN 9 750 thsnd which comprises 69% of the financial expenses. In 2007 expenses for interests were equal to BGN 4 731 thsnd which comprises 78% of the financial expenses. The negative differences from exchange rate fluctuation considerably increased. In 2007 such were equal to BGN 52 thsnd, while in 2008 - BGN 3 325 thsnd. This is due to exchange rate differences arising from re-valuation of payments in CHF by credits agreements signed with UBS AG. According to the audited consolidated statement for the year ending on 31st of December 2008, Holding Roads Plc has reported net profit within the amount of BGN 2 439 thsnd. In 2007 the net profit was equal to BGN 15 611 thsnd. Page 4 of 61 Thousand BGN Indicators 2008 2007 Operating income 200 002 151 546 Operating cost 196 371 133 892 Net operating profit/loss 2 439 15 611 Net income from sales 189 529 150 534 Expenses by type 182 208 127 815 Financial income 10 473 1 012 Financial cost 14 163 6 077 Value of assets 394 966 196 204 Net assets 51 955 56 421 Shareholder’s equity 30 672 432 Number of shares 30 672 000 17 280 Financial Indicators 2008 and 2007 thousand BGN 250 000 200 000 150 000 100 000 200 002 151 546 196 371 133 892 50 000 2 439 15 611 0 Operating income Operating cost Net result 2008г. 2007г. Page 5 of 61 Key ratios 2008 Income by sales profitability /const./ 1,29% Return on equity /ROE/ /const./ 4,86% Return on assets /ROA/ /const./ 0,62% P/E /const./ 39,61 P/S /const/ 0,51 Total liquidity coefficient /const./ 1,07 Current assets/current liabilities Financial autonomy coefficient /const./ 0,13 Equity/liabilities In the calculation of coefficients the following has been used: • the net profit according to the audited consolidated annual statements for 2008; • the net income by sales according to the audited consolidated annual statements for 2008; • the equity according to the audited consolidated annual statements from 2008; • the sum of assets according to the audited consolidated annual statements for 2008; • the weighted average price from the last stock session at which stock of the Company was traded in 2008. Page 6 of 61 Information about the basic categories of goods, products and/or services supplied, including an indication of their share in the income generated by sales as a whole and the changes which occurred during the reported financial year The consolidated income by sales of Holding Roads Plc is estimated at BGN 189 529 thsnd in 2008, while in 2007 – BGN 150 534 thsnd. The income by construction and assembly works (CAW) comprises the biggest relative share, i.e. 76% in 2008 and 77% in 2007. It is followed by the income by sale of products (asphalt mixtures, inert materials, traffic safety facilities) which is 11% in 2008 and 7% in 2007. Major products and/or services by class Thousand BGN Products/services by class 2008 2007 Amount Rel. Share Amount Rel. share Sale of asphalt mixtures 10 803 5,69% 3 196 2,12 % Sale of inert materials 8 876 4,68% 3 111 2,07 % Sale of traffic safety facilities 1 959 1,03% 4 512 3,00 % Transport services and machines leasing 482 0,25% 212 0,14 % Construction and rehabilitation 144 556 76,3% 115 662 76,77 % Other income 22 853 12,06% 23 958 15,90 % Total income 189 529 100 % 150 651 100 % Page 7 of 61 Breakdown of income by basic categories of products/services Breakdown of income by basic categories of products/services 2008 5,7% 4,7% 1,0% 0,3% 12,1% 76,3% Construction and rehabilitation Sale of asphalt mixtures Sale of inert materials Sale of traffic safety facilities Transport services and machines leasing Other income Breakdown of income by basic categories of products/services 2007 0,1% 2,1% 3 % 15,9% 2,1% 76,8% Construction and rehabilitation Sale of asphalt mixtures Sale of inert materials Sale of traffic safety facilities Transport services and machines leasing Other income Page 8 of 61 Income by categories of operations, domestic and foreign markets, and information about the sources of supply of production materials Income by categories of operations Thousand BGN Income Categories 2008 2007 of products/services Amount Rel. share Amount Rel. share Sale of asphalt mixtures 10 803 5,69% 3 196 2,12 % Sale of inert materials 8 876 4,68% 3 111 2,07 % Sale of traffic safety facilities 1 959 1,03% 4 512 3,00 % Transport services 482 0,25% 212 0,14 % Construction and rehabilitation 144 556 76,3% 115 662 76,77 % Other income 22 853 12,06% 23 958 15,90 % Total income 189 529 100 % 150 651 100 % Main clients of the companies in the Group are the state, municipal and local institutions which are responsible for the construction and maintenance of the road infrastructure. The business operations of the companies are diversified both in terms of type of works and in terms of assignors. The Holding fulfills orders assigned by the Road Infrastructure National Agency and the Ministry of Regional Development and Public Works, as well as construction contracts made and entered into with various municipalities and with private investors. Income by Employer Thousand BGN Income Employer 2008 2007 Amount Share Amount Share National Road Infrastructutre Agency 59 220 31,24% 71 066 47,17% Ministry of Regional Development and 338 0,18% 10 598 7,03% Public Works Municipalities 54 386 28,7% 31 731 21,06% Other 75 585 39,3% 37 256 24,73% Total income 189 529 100% 150 651 100% Page 9 of 61 A main contractor of the companies is the Road Infrastructure National Agency, holding a relative share in the total income equal to 31% in 2008, respectively 47% in 2007. The share which is held by the municipalities in the total income is equal to 29% in 2008 and 21% in 2007. In 2008 0,18% of the income is held by the Ministry of Regional Development and Public Works, while during the previous year it was 7%. The share which is held in the income by other assignors is 39% in 2008 and 25% during the previous year. Income by Employer 2008 39,9% 31,2% 0,2% 28,7% Road Infrastructure National Agency Ministry of Regional Development and Public Works Municipalities Other Income by Employer 2007 24,9% 47,2% 11,3% 9,6% 7,0% Road Infrastructure National Agency Ministry of Regional Development and Public Works Sofia Municipality Other municipalities Other Page 10 of 61 During the previous two years the business operations of Holding Roads Plc and its subsidiaries were concentrated fully on the home market.

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